Jacksonville Medical Plaza, LLC

Available for §1031 exchange w llc investment

Offering Purchase Price: $33,498,000

Offering Price Per SF: $252.84

  • Purchase Date: 1st Quarter 2008
  • Offering LTV: 58.09%
  • Offering Price Cap Rate: 6.30%
  • 1st Year Cash Flow: 6.25%

Jacksonville Medical Plaza consists of two multi-tenant medical office buildings in Jacksonville, Florida. Built in 1974 and renovated in 1995, the approximately 132,000-squarefoot property is situated on more than 11 acres.

Available for §1031 exchange w llc investment

Located across the street from Memorial Hospital Jacksonville, one of the city’s major hospitals, Jacksonville Medical Plaza offers tenants and visitors ample parking with nearly 600 spaces, resulting in a parking ratio of 4.5 spaces per 1,000 square feet. Jacksonville Medical Plaza is currently 97 percent leased to multiple tenants, including Memorial Hospital Jacksonville and Brooks Rehabilitation Hospital.

Property Summary

Jacksonville Medical Plaza consists of two multi-tenant medical office buildings in Jacksonville, Florida. Built in 1974 and renovated in 1995, the approximately 132,000-squarefoot property is situated on more than 11 acres. Located across the street from Memorial Hospital Jacksonville, one of
the city’s major hospitals, Jacksonville Medical Plaza offers tenants and visitors ample parking with nearly 600 spaces, resulting in a parking ratio of 4.5 spaces per 1,000 square feet. Jacksonville Medical Plaza is currently 97 percent leased to multiple tenants, including Memorial Hospital Jacksonville and Brooks Rehabilitation Hospital.

TIC Offering

  • Offering Size: $14,040,000
  • Price Per 1% Ownership: $140,400 equity and
    $194,580 assumed debt
  • Minimum Investment per SPE: 3.00% = $421,200
    equity and $583,740 assumed debt for a total
    purchase price of $1,004,940
  • Suitability: Accredited Investors Only

LLC Offering

  • Offering Size: $702,000
  • Price Per Unit: $5,000
  • Minimum Investment: $25,000
  • Suitability: Accredited investors only

Business Plan

  • Preserve the capital investment.
  • Realize income through the acquisition, operation and sale of the
    property.
  • Make monthly distributions, which may be partially tax-deferred as a result of depreciation and amortization expenses.
  • Within approximately five years, profitably sell the property based on the value added through effective management and operation of the property.
  • There is no guarantee that the business plan will be successfully executed, that the property’s value will be enhanced, or that the property will be sold within the planned time period.
  • Although the manager has contracted to purchase the property, no assurances can be given that the company will acquire the property.
  • The property consists of a leasehold interest in the office center and the land underlying it pursuant to the ground lease with an original term
    of 99 years and an expiration date of July 1, 2099. Because of the long term remaining on the ground lease, no assurance can be given that the
    company is able to sell and/or refinance the property without material adverse impact from the ground lease.
  • The property is largely dependent on two tenants, Memorial Hospital Jacksonville and Brooks Rehabilitation Hospital, which collectively represent 83 percent of the property – the loss of which could negatively impact its cash flow.
  • Unless extended by the tenants, the leases representing approximately 59 percent of the property will expire within the next five calendar years. In
    addition, the leases representing approximately 17 percent of the property contain early termination options.
  • Purchasers of the property will be restricted by provisions of the ground lease and the declaration of covenants and restrictions that limit the type
    of activities for which the property may be used, which may make it more difficult to lease or sell the property in the future.
  • Because a majority of the tenants at the property are largely dependent on the healthcare industry, an adverse change in the healthcare industry
    could negatively affect the ability of such tenants to make lease payments and the cash flow generated by the property.Because a majority of the tenants at the property are largely dependent on the healthcare industry, an adverse change in the healthcare industry
    could negatively affect the ability of such tenants to make lease payments and the cash flow generated by the property.

Major Tenants (10 Total Tenants)

Genesis Rehabilitation Hospital, Inc. d/b/a Brooks Rehabilitation Hospital

www.brooksrehab.org
Square Feet: 41,645 or 31.43% of the property Lease Expiration: August, 2021

Brooks Rehabilitation Hospital is a 143-bed acute physical rehab hospital that has provided care to the residents of Northeast Florida and Southeast Georgia for over 35 years. Founded in 1970, the rehabilitation hospital is unique in the region with its highly trained staff and a wide range of services. To supplement their inpatient services, Brooks has created an extensive network patient centers as well as a cutting-edge research facility which allow them to provide the best continuum of care possible to the communities they serve.

Memorial Healthcare Group, Inc. d/b/a Memorial Hospital Jacksonville

www.memorialhospitaljax.com

Square Feet: 19,611 or 14.80% of the property Lease Expiration: January, 2011

Square Feet: 10,280 or 7.75% of the property Lease Expiration: February, 2010

Square Feet: 9,296 or 7.01% of the property Lease Expiration: June, 2010

Founded in 1969, Memorial Hospital Jacksonville is a 353-bed acute care hospital owned by Hospital Corporation of America (HCA). The hospital currently has a staff of more than 1,900 employees and more than 700 physicians in 15 medical specialties. The hospital is also known for its programs of technological advances, as well as growth and expansion to meet the ongoing needs of the community. HCA is the largest for-profit health system in the country with $25 billion in revenues and $23 billion in assets as of December 31, 2006. HCA currently operates 179 hospitals and 104 freestanding surgery centers in 20 states, as well as London, England and Geneva, Switzerland. HCA is not a guarantor under the leases with Memorial Healthcare Group, Inc.

Option to terminate at any time with 90 days notice and no termination fee.

Location Information

Jacksonville is the largest city in the state of Florida, and the largest city in terms of land area in the contiguous United States. Incorporated in 1832, it was named in honor of President Andrew Jackson, the first military governor of Florida. Located in the northeastern corner of the state on the banks of the St. Johns River, Jacksonville is the state’s leading transportation and distribution hub. The strength of the city’s economy lies in its broad diversification and is balanced among distribution, financial services, biomedical technology, consumer goods, information services, manufacturing, and other industries. Jacksonville has the largest deepwater port in the South Atlantic and is a leading port in the United States
for automobile imports.

Office Market

  • The total office market for the Jacksonville area has experienced market vacancy decrease of 0.1 percentage points from the end of the 4th quarter 2006 to the end of the 3rd quarter 2007.
  • Overall market rental rates increased the past year from $18.38 in 4th quarter 2006 to $18.94 at the end of the 3rd quarter 2007, this amounts to an increase of $0.56 or 3.1% overall.
Economic Trends
  • The Jacksonville Metropolitan Area (MSA) is the 40th largest MSA in the United States with approximately 1.3 million residents as of 2006.
  • The biggest news for Jacksonville, according to REIS, is the massive new facility under development at Jacksonville’s port; upon completion it could help Jacksonville to emerge as the third-largest port on the East Coast.
  • According to the U.S. Department of Labor, Bureau of Labor and Statistics, non-agricultural employment as of July 2007 was up 2.4% from 12 months earlier, while the professional and business services sector in the Jacksonville MSA increased by 3.8% from July 2006 through July 2007.

ABOUT Triple Net Properties, LLC

Triple Net Properties, LLC has time-tested experience in real estate syndications, acquisitions, leasing and property management. Triple Net currently manages a growing portfolio of over 39 million square feet of real estate in 29 states valued in excess of $5.4 billion. Although past performance is no guarantee of future results, Triple Net Properties, LLC has an unparalleled track record and has acquired 293 properties to date. Triple Net and affiliates have sold 107 properties for more than $2.5 billion since 2000.

Triple Net Properties, LLC is a wholly-owned subsidiary of Grubb & Ellis Company, a nationwide commercial real estate asset management and investment firm.